Question: What kind of penalties will I be charged if I pay my taxes late?
Answer: If you fail to pay all your taxes by the April 15* deadline, you’ll have to pay the IRS interest and penalties on your underpayment. The IRS charges interest at its prevailing rate, which it publishes quarterly. The late payment penalty is generally .5% for each month there is an unpaid balance, up to a maximum 25% penalty.
When you file a late return with a balance due, another nasty penalty kicks in – the late filing penalty. This penalty amounts to 5% per month, for a maximum of five months. For example, if you owe $5,000 in taxes and failed to file a return or an extension by April 15, the failure-to-file penalty could build up to as much as 25% or $1,250.
* When April 15 falls on a Saturday, Sunday, or legal holiday, the deadline for filing is moved to the next business day.
